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Access to the Internet and financial performance of small business households

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Abstract

With increased focus on survival strategies for small farm businesses, we investigate the impact of access to the Internet on household income and expenses of small farm businesses and households. Using a nationwide data from the U.S. and non-parametric matching estimators, the study finds a significant positive impact of access to the Internet on total household income and off-farm income. Our study suggests that small farm businesses benefit from Internet access as it increases business income, off-farm income and total household income. Also, access to the Internet reduces some input costs and household expenses.

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Notes

  1. Gross cash farm income is the sum of the farm’s cash and marketing contract revenues from the sale of livestock and crops. It includes all farm-related revenue, not just crop and livestock sales, and is based on annual sales, not the value of annual production.

  2. Further, in addition to other reasons for Internet adoption, Mishra et al. [25], studying farm business households, point out that the Farm Service Agency, a major provider of farm program payments to farmers, has about 78 farm program forms available online for farmers to complete and submit electronically via the Internet.

  3. Total household income is composed of off-farm income and farming income. Total off-farm income includes income from wages and salaries, off-farm business income, and income from non-earned sources.

  4. It should be pointed out that most existing studies have explored Internet applications, purchasing patterns, and factors influencing Internet adoption.

  5. The financial measures used in this study are (1) incomes: total household income,  total off-farm income, gross cash farm income, and net farm income; (2) cost: total variable costs, marketing and storage cost, fertilizer and chemical cost, and utilities, household supplies, and other household expenses.

  6. Recall total household income is composed of income from both off-farm sources and farm sources.

    Table 3 Estimates of the average treatment effect on treated (ATT)
    Full size table

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Author information

Authors and Affiliations

  1. Department of Agricultural Economics and Agribusiness, Louisiana State University, 32 Martin D. Woodin Hall, Baton Rouge, LA, 70803, USA

    Aditya R. Khanal

  2. Department of Agricultural Economics and Agribusiness, Louisiana State University, LSU AgCenter, 128 Martin D. Woodin Hall, Baton Rouge, LA, 70803, USA

    Ashok K. Mishra

  3. Department of Agricultural Economics and Agribusiness, Louisiana State University, Martin D. Woodin Hall, Baton Rouge, LA, 70803, USA

    Krishna H. Koirala

Authors
  1. Aditya R. Khanal
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  2. Ashok K. Mishra
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  3. Krishna H. Koirala
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Correspondence to Ashok K. Mishra.

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Khanal, A.R., Mishra, A.K. & Koirala, K.H. Access to the Internet and financial performance of small business households. Electron Commer Res 15, 159–175 (2015). https://doi.org/10.1007/s10660-015-9178-3

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